“The success of the National Treasury’s latest growth plan will hinge on the practical implementation and collaboration with key stakeholders.”

This is according to Prof Raymond Parsons, a well-known economist and academic from the North-West University (NWU) Business School.

He says the Treasury's 77-page growth plan, now published for comment, offers wide-ranging, constructive and fruitful ways for South Africa to make sense of its current economic malaise, and proposes several sensible policies and projects urgently needed to turn the economy around.

“South Africa has reached a crucial fork in the road towards the goal of shared prosperity. By prioritising economic transformation, and inclusive growth and competitiveness, the plan again emphasises the extent to which fundamental economic reforms are necessary to meet the challenges of unemployment, poverty and inequality,” he adds.

“Drawing on the National Development Plan the Treasury's growth plan reiterates the extent to which the country's weak economic performance is largely the outcome of domestic constraints and structural rigidities which have weakened the willingness of business to invest.”

According to Prof Parsons, the growth plan recognises the need to reduce policy uncertainty and create an overall supportive business environment – especially for SMMEs – in order for South Africa to successfully obtain the necessary investment and economic growth. He says a lighter regulatory framework forms an important dimension of the general approach.

“This generally familiar but imperative policy terrain for South Africa has now been broadly endorsed by the National Treasury's growth document. The country must now steadily move from drafting plans to tangible implementation in ways that strongly boost investor confidence and also make a visible difference to the lives of average citizens.”

He says South Africa here needs a capable “delivery state” as a key mechanism to ensure positive outcomes, and to make its “mixed” economy work better – sooner rather than later.

“The success of any growth plan will therefore again hinge on its consistent and effective implementation, in collaboration with key stakeholders. The scale of the challenge is reflected in the fact that, even on the most favourable assumptions, the growth plan's scenarios envisage only moving South Africa's growth rate from 0,8% to 2,3% over the next decade. South Africa should nevertheless try to see this as a major on-going challenge to do even better than these scenarios.”

Prof Parsons says even these relatively modest economic performance expectations will however require the necessary political will to take the tough decisions still needed, such as with the restructuring of state-owned enterprises, stabilising the country's public finances and reforming the labour market.

He says the plan's framework confirms that there can be no quick fix for South Africa's socio-economic challenges, but nonetheless correctly urges that the fundamentals for a higher growth trajectory must be laid now to reap tangible benefits later.

“South Africa therefore needs to urgently establish a national economic purpose. At a practical level the confidence-building potential of the Treasury's growth plan thus requires early evidence of commitment, consistency and steady implementation of its key strategies., For example, these need to be included in the forthcoming Medium-Term Budget Policy Statement in October and reiterated at the next presidential investment summit in November.”

Photo: Prof Raymond Parsons.